Venezuela goes “all-in” on state-backed Petro cryptocurrency

From today, the national Venezuelan Petro cryptocurrency will be officially exchanged for the value of a barrel of oil on the global markets – approximately $60 US dollars at the time of writing.

The first ever state-backed cryptocurrency: Petro (PTC)

Cryptocurrency adoption received a boost over the weekend, following the progression of President Maduro’s plan to peg the Venezuelan national currency’s exchange rate to the sovereign cryptocurrency Petro (PTR). As per the white paper issued by the Venezuelan government, “each Petro will be backed by a barrel of oil and will be sold at the same price.”

The current price of a barrel of oil is around $60. On Friday (17th August), Venezuela’s President had announced that that one Petro (PTR) cryptocurrency would equal $60 after the redenomination planned for today.

1 Petro = 1 Oil Barrel = 60 Dollars

Today, Venezuelan banks will be closed to prepare for the release of the freshly printed, Petro pegged “sovereign bolívar”. In effect, this deletes five zeroes from the Venezuelan national currency devaluing it by 96 per cent.

The South American country has been suffering extreme hyperinflation and international sanctions for its “unconstitutional” and “undemocratic behavior”. According to the Guardian, inflation is so high that in Venezuela a chicken costs over 14 million (pre-Petro) bolivars.

In a bid to overcome US and EU sanctions, the Venezuelan government has outlined in its white paper, that the strategy “will foster the emergence of a fairer, more collaborative global financial system that is conducive to growth, autonomy, and trade among developing economies..”

Trump ban on Venezuelan Petro cryptocurrency

It is not at all yet clear whether Venezuela’s bold national Petro cryptocurrency adoption is going to be successful at tackling inflation or international sanctions, given that the US President Donald Trump banned American use of Venezuelan cryptocurrency in its latest sanctions against Maduro’s government, citing the Independent.

The cryptocurrency community on Petro

The cryptocurrency community itself is not impressed with Petro (PTR). Rating website ICOindex.com giving the token a “scam status,” saying the project was missing critical information, from the description of the mechanism to its technology and supposed oil-backing. And also, but even more importantly it is centralised ie governed by the Venezuelan state. The cryptocurrency community is mainly interested in decentralised projects.

CryptoCoinsZone wishes the Venezuelan people a fast recovery from this economic turmoil and unrestricted access to the whole cryptocurrency market.

Disclaimer: This article is for information and entertainment purposes only and should never be construed as investment or trading advice. Bitcoin and other cryptocurrencies can be extremely volatile and you should always do your due diligence and research on the topic, utility, product or service and legal and regulatory requirements before deciding to invest. We do not take any responsibility for possible losses you may incur.